French IT firm Atos shares dropped significantly after the company disclosed accountancy errors at two of its US companies
In a statement, Atos reported that as part of the annual audit, the company had identified accountancy errors in two of its US entities, Atos IT Solutions and Services Inc and Atos IT Outsourcing Services LLC.
The report identified several matters relating to internal control weaknesses over the financial reporting process and revenue recognition in accordance with IFRS 15 Revenue from Contracts with Customers.
The IT consulting firm’s stock plunged as much as 22%, the lowest since 2018. This drop knocked more than €1bn (£866m) off its market value.
The revenue for North America in 2020 reached €2,612m (£2.263m) and the turnover and the operating margin of those two entities represent 11% of consolidated turnover and 9% of consolidated operating margin.
As a result of the errors, the group management has hired external firms to do a forensic investigation and obtain evidence that prove the financial reporting of the US entities is free of material misstatements. Atos has yet to name the external firms handling this investigation.
Grant Thornton LLP and Deloitte handled the audit for the 2020 year end and Atos has confirmed that the financial statements released on 18 February 2021 are unchanged.
Atos plans to release its first-quarter results on 20 April 2021 and has confirmed that its annual general meeting is set for 12 May 2021 and will be held ‘behind closed doors’.